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In our Aug. 29 issue, Barron's pointed readers to the country's top 100 independent financial advisors. We thought it might be an opportune time to survey investment pros at some of the most successful firms about how they are using exchange-traded funds under current conditions.

One of those was Michael Yoshikami of YCMNET Advisors. The Walnut Creek, Calif.-based firm's founder moved up three notches to 30th place in the most recent rankings. Part of that rise has involved the growing adoption of ETFs, which he estimates make up about 40% of the firm's $1 billion-plus in client assets. "ETFs are playing key roles as complements to our core-stock positions in more volatile parts of the market," Yoshikami says.

Carving up domestic markets with ETFs is a significant part of his strategy of controlling portfolio risk while optimizing returns. For example, the firm's analysts are expecting shoppers to remain relatively conservative. Yoshikami views consumer-staples ETFs as a way to spread downside risk without losing exposure to an important segment of the market.

Yoshikami also favors single-country ETFs to provide more precise allocations in emerging markets. Those include funds targeting favorites such as Singapore, South Korea, Australia and Brazil. "The sell off in emerging markets looks temporary, and we're expecting to see improving conditions next year," Yoshikami says.

Telemus has also been boosting stakes in high-yield bond funds. Yields between "junk" issues and those of Treasuries are extremely attractive, Robinson says. He figures it's unlikely corporate-credit markets will lead the way if there's a more significant downturn. "So we're pretty comfortable with risks in high-yield bonds and think we're being well-compensated at present levels," he adds.

Robinson sees mortgage real-estate investment trusts as a strong income-producing alternative. "The biggest concern in mortgage REITs would be if everyone starts to refinance their mortgages, which would lower yields for existing investors," he says. But most of those who could refinance have done so by now, he believes. "So the real risk is that the government steps in with a program that can significantly increase re-fi activity," Robinson says. He's wary of a proposal in Washington to let homeowners with underwater loans refinance at lower rates.